Mastering Innovation: Understanding JTBD Theory
Innovation is crucial for product leaders, but many feel their organizations are underperforming. A McKinsey poll shows that while 84% of global executives value innovation, 94% are unhappy with their company's efforts. Despite having more data than ever, many innovations still don't succeed.
The main problem is relying too much on correlation data, which shows patterns but not causes. Knowing customer demographics, for instance, doesn't explain why they buy something. To innovate effectively, we need to understand the actual progress customers want to make—this is where JTBD Theory comes in.
What is JTBD Theory?
We all have different jobs to do in our lives, from passing time in line to finding a fulfilling career. When we buy something, we "hire" it to help with a specific job. If it does well, we use it again; if not, we look for something else. This idea comes from a course by Theodore Levitt at Harvard Business School and complements disruptive innovation theory by focusing on why customers make certain choices. Levitt once said “People do not want a quarter-inch drill, they want a quarter inch hole.”
Case Study: The Condo Market
Bob Moesta, an innovation consultant, was asked to help boost condo sales for a Detroit building company. Despite good pricing and luxury features, sales were low. Moesta found that buyers were hesitant because they were emotionally attached to their dining room tables, which held family memories. The company adjusted their offerings by creating space for dining tables and providing moving and storage services. This shifted their focus from just selling condos to "moving lives," leading to a 25% sales increase during a market downturn.
Source: Harvard Business Review
Identifying Jobs to Be Done
To find out what jobs your customers need help with, ask these questions:
Do you have a job that needs to be done?
Where do you see non-consumption?
What workarounds have people invented?
What tasks do people want to avoid?
What surprising uses have customers invented for existing products?
For example, NyQuil's transformation into ZzzQuil happened because people used it as a sleep aid. By focusing on the job of helping people sleep without extra ingredients, they created a successful new product.
Source: Harvard Business Review
Creating Customer Experiences
Identifying the job to be done is just the start. Companies must also create the right customer experiences and integrate them into their processes. American Girl dolls succeed because they offer more than toys—they provide experiences and stories that resonate with both kids and parents. The detailed attention to packaging enhances the experience, making it hard for competitors to copy.
Source: Harvard Business Review
Aligning Processes
Southern New Hampshire University (SNHU) shows how aligning processes to the job to be done can lead to success. Initially struggling, SNHU focused on meeting the needs of online students—older learners balancing work and family. They revamped their processes to provide quick responses and streamlined admissions, leading to a 34% annual growth rate and $535 million in revenue.
Conclusion
Innovation works best when companies focus on JTBD Theory instead of just data correlations. By understanding and addressing the specific progress customers seek, businesses can create products and experiences that truly resonate, driving sustained success and differentiation in the market.
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